New Rules on Federal Bonuses Could Affect Efforts to Boost IT Skills

By Brittany Ballenstedt

August 15, 2013

In final rules issued Wednesday in the Federal Register, the Office of Personnel Management outlined important changes to the way agencies evaluate and award recruitment, retention and relocation (3R) bonuses -- changes that could affect how agencies hire and keep employees with essential technology skills. The new rules take effect Sept. 13.

The new rules allow agencies to request a waiver through OPM to authorize recruitment incentives above the 25 percent payment limitation for an individual or group of employees based on a critical agency need. The rules require that the recruitment bonus granted under the waiver does not exceed 50 percent of an employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years in the service period.

The rules also modify the recruitment incentive program by requiring each agency to review each decision to target a specific group of similar positions at least annually to determine whether such positions are still difficult to fill. If the position is no longer difficult to fill, agencies should no longer offer the incentive.

The rules also make changes to retention incentives in requiring that agencies consider the quality and availability of employees in an agency’s succession plan before authorizing a retention incentive.

Finally, the rules require federal employees to maintain residency in the new geographic area for the duration of their service agreement, or face termination of the incentive agreement. The final rules clarify that agencies must determine what constitutes the “new geographic area” in relocation incentive agreements.

OPM initiated a review of the 3Rs program in 2010 because of concerns about the continued growth of the incentive payments given recent labor market conditions. OPM and the Office of Management and Budget in June 2011 directed agencies to cap payments on 3Rs incentives at 2010 levels.

Will the new rules help or hinder your agency’s ability to recruit and retain highly skilled IT talent?

Due to an editing error, the original headline and opening paragraph of this story incorrectly suggested the new rules would hurt IT staffs. It is not yet clear how the new rules will affect recruiting and retention.